Category

Industrials

Industrials: ROHM Co Ltd, Orient Overseas International, Siemens Gamesa Renewable Energy, S.A., TeamLease Services and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Rohm (6963 JP): Short-Term Caution, Long-Term Buy
  • Orient Overseas Intl (316 HK): Cursed by Index Inclusion?
  • Siemens Energy Finally Drops the Bomb
  • TeamLease – Strong Demand to Drive Growth in FY23

Rohm (6963 JP): Short-Term Caution, Long-Term Buy

By Scott Foster

  • FY Mar-22 sales and profits were well ahead of guidance. Management is forecasting further growth this year, but mostly in 1H.
  • Margins are under pressure from rising production costs and depreciation, but cash flow and the balance sheet are strong.
  • Gearing to vehicle electrification and should provide protection on the downside and support long-term growth. 

Orient Overseas Intl (316 HK): Cursed by Index Inclusion?

By Osbert Tang, CFA

  • While Orient Overseas International (316 HK) will welcome its inclusion in Hang Seng Index, there is risk that it will follow the pattern that new inclusions performed badly post entry.
  • Globally, many container shipping stocks have retreated from their peaks in Mar this year, but OOIL is still hovering around its peak level, making is susceptible to a correction.
  • Challenging factors include softening sequential momentum, peaking out of spot rates, weaker demand picture, increase in supply pressure and declining earnings trend are weighing on the industry and the company.

Siemens Energy Finally Drops the Bomb

By Jesus Rodriguez Aguilar

  • Siemens Energy hasn’t expected to its CMD and instead announced on Saturday late evening an €18.05/share voluntary cash tender offer for the remaining 32.9% of Siemens Gamesa it doesn’t own.
  • The consideration represents a 27.7% premium and 23.1x EV/Fwd EBITDA. It seems fair and higher than that initially expected. Siemens Energy is likely to issue a convertible.
  • Upon market open on 23 May, expect the shares to close most of the gap with the offer price. Siemens Gamesa will likely exit the Ibex 35 in H2 2022.

TeamLease – Strong Demand to Drive Growth in FY23

By Motilal Oswal

  • Strong performance, but valuations remains fair – TEAM delivered a strong operational performance in 4QFY22, with revenue up 3% QoQ on broad-based growth across verticals. It also added ~12k associates after a very strong hiring in recent quarters, benefitting from a strong demand environment.
  • Good revenue growth and margin expansion in 4QFY22 – revenue growth at 3% QoQ was a little below our estimate of 6%.
  • Key highlights from the management commentary – The management remains optimistic about its growth prospects and said that all businesses are showing a good recovery.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Before it’s here, it’s on Smartkarma

Industrials: Japan Post Holdings, Towa Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan
  • TOWA (6315): Watch the Order Flow for an Entry Point

Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan

By David Blennerhassett

  • The downside to Woodside Petroleum (WPL AU) remains, but the reasoned downside is smaller than it was before.
  • CVC walks, but it doesn’t stop Brambles Ltd (BXB AU) privatisation speculation. 
  • If Tabcorp and The Lottery Corp are seen as low volatility growth properties, then the stability of cashflow puts it into rarified air among “growth bias” which has gotten trashed. 

TOWA (6315): Watch the Order Flow for an Entry Point

By Scott Foster

  • Management is guiding for single-digit sales and profit growth in FY Mar-23, but new orders fell 39% from Q2 to Q4 of last fiscal year.
  • The Book-to-Bill Ratio fell from 1.66 in Q2 to 1.01 in 4Q, but quarterly orders and sales both remained far above the levels recorded in the three years to Sep-21.
  • Even if the company does not drop into the red as it did in previous cycles, the downside risk to profits could be 50%. 

Before it’s here, it’s on Smartkarma

Industrials: Orient Overseas International, HomeServe PLC and more

By | Daily Briefs, Industrials

In today’s briefing:

  • HSI Index Rebalance: Four Weddings & A Funeral
  • Brookfield/HomeServe: Agreed 1200p Offer

HSI Index Rebalance: Four Weddings & A Funeral

By Brian Freitas


Brookfield/HomeServe: Agreed 1200p Offer

By Jesus Rodriguez Aguilar

  • HomeServe has reached an agreement on a 1,200p cash offer (vs. my 1,206 TP), 71% premium and an implied EV of £4,706 million; 13.3x EV/Fwd EBITDA, 25.7x Fwd P/E.
  • While the deal is highly likely to close (15.3% IRR by year 8) and the founder will bag £490 million, HomeServe could still attract interest from other parties.
  • Gross spread as of today’s close is 3.4% and the estimated annual return would be 7.9% assuming settlement on 30 October. Reiterate long HSV LN.

Before it’s here, it’s on Smartkarma

Industrials: SCREEN Holdings, Siemens Gamesa Renewable Energy, S.A., Berli Jucker, Avic Shenyang Aircraft, Kajaria Ceramics and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Screen Holdings (7735 JP): Good Results, Optimistic Guidance, Great Uncertainty
  • Siemens Energy/Siemens Gamesa: Possible Delisting Offer
  • BJC: Gaining Market Share on Modern Retail Business
  • AVIC Shenyang (600760 CH): Defense Is Defensive
  • HSIE Results Daily: Kajaria Ceramics

Screen Holdings (7735 JP): Good Results, Optimistic Guidance, Great Uncertainty

By Scott Foster

  • Screen Holdings beat FY Mar-22 profit guidance by a wide margin. This year, management is aiming for 12% sales growth and a 22% increase in operating profit.
  • New SPE orders have exceeded sales for seven straight quarters and the backlog is at a record high. But 1H of FY Mar-23 is expected to be weak.
  • A new factory is scheduled to come on line in 4Q, raising total SPE capacity by 20%. The risk is that this will coincide with a downturn in demand.

Siemens Energy/Siemens Gamesa: Possible Delisting Offer

By Jesus Rodriguez Aguilar

  • Siemens Energy is considering a cash offer for the 32.9% of Siemens Gamesa it does not own. Group simplification and major restructuring would make sense.
  • Applying the 6-month VWAP rule, the offer price could reach c. €18.1/share. Takeover regulation says the offer must be in cash and the price equitable, allowing for other calculation methods.
  • Siemens Energy does not need to offer a high premium and could make an announcement on 24 May (CMD). Recommendation is long.

BJC: Gaining Market Share on Modern Retail Business

By Pi Research

  • Yesterday analyst meeting came out with slightly positive tone. However, weak short-term performance from rising energy cost and lower consumer purchasing power and limited upside to our target price
  • From management guidance, gross profit margin will be decline 50bps YoY in 2022 due to a rising energy cost and raw material in packaging business and consumer supply business. Meanwhile
  • We have positive view on medium to long-term performance supported by better modern retail performance (BigC). Currently,BigC market share was at 21% (+1% to 2% YoY) and we expect BigC 

AVIC Shenyang (600760 CH): Defense Is Defensive

By Osbert Tang, CFA

  • As a major player in China’s defense sector with established franchise in combat aircraft, Avic Shenyang Aircraft (600760 CH) will enjoy earnings stability, reflecting positively on its defensiveness.
  • We believe it will benefit from China’s efforts to narrow military gap against the US and the increase in military spending due to rising geopolitical tension globally. 
  • AVIC Shenyang is less affected by pandemic lockdowns and has showed good capability to improve profitability, which are reflected in the solid 61% growth in 1Q22 recurring profit.

HSIE Results Daily: Kajaria Ceramics

By HDFC Securities

  • Q4FY22 performance: Kajaria posted lower-than-estimated margin (~200bps miss) in Q4FY22, as margin compressed QoQ on rising gas prices (crude linked).
  • Tiles sales volumes/revenue rose 2/16% YoY (2-year CAGR 19/29%). Outsourced volume continues to lead growth (+12% YoY, 2-year CAGR 39%).
  • Outlook: For FY23, KJC targets volume/revenue growth of ~15-20%/20-25%.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Before it’s here, it’s on Smartkarma

Industrials: Toyo Construction, Daifuku Co Ltd, Cahya Mata Sarawak, Kajaria Ceramics and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Yamauchi No.10 Announces Its Offer (If Toyo Accepts)
  • Daifuku – Just Too Pricey
  • Cahya Mata Sarawak (CMSM.KL) – 1 Q22: Beats Expectations
  • Kajaria Ceramics – Soaring Gas Prices Dent Margins

Yamauchi No.10 Announces Its Offer (If Toyo Accepts)

By Travis Lundy

  • Yamauchi No.10 Family Office and Toyo Construction (1890 JP) have been going back and forth in the last few weeks, with TC trying to figure out if it accepts YFO.
  • The Infroneer Tender Offer ends today, and with that – perhaps coincidental timing and perhaps not – YFO has formally announced an intention to launch a Tender Offer.
  • That puts the ball back in Toyo Construction’s court. The deal would be at ¥1,000/share and would launch in late June… if TC is ready and willing.

Daifuku – Just Too Pricey

By Mio Kato

  • Daifuku’s 4QFY22 was strong with revenue of ¥143bn (+3.8% vs. consensus) and OP of ¥17.3bn (+8.2% vs. consensus). 
  • Guidance was relatively strong at the top line, 1.1% above but margin assumptions were far too conservative resulting in a 4.1% miss vs. consensus. 
  • One may think that creates upside potential but guidance for 2H to grow vs. 1H is optimistic and valuations are too stretched to withstand a deceleration in earnings momentum.

Cahya Mata Sarawak (CMSM.KL) – 1 Q22: Beats Expectations

By Maybank Research

  • Tactical U/G to BUY
  • Core net profit up +123% YoY, +5% QoQ
  • Optimistic on prospects
  • Two deals pending completion

1Q22 core net profit of MYR72m was 37%/34% of our/consensus FY22E, with the beat coming from its cement, road maintenance and property ops, and strong assoc contribution. We make no change to our earnings forecasts pending completion of sale of its 25% stake in OMS. The stock now offers >10% upside (incl. div yld) to our unchanged MYR1.27 TP (based on 7x FY22E PER; -1SD of LT mean). Tactical U/G to BUY.


Kajaria Ceramics – Soaring Gas Prices Dent Margins

By HDFC Securities

  • Q4FY22 performance: Kajaria posted lower-than-estimated margin (~200bps miss) in Q4FY22, as margin compressed QoQ on rising gas prices (crude linked).
  • Outlook: For FY23, KJC targets volume/revenue growth of ~15-20%/20-25%.
  • It expects India’s tiles export to increase by ~35% YoY, as sharp spikes in gas and electricity prices in European countries have increased Indian tile’s competitiveness.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Before it’s here, it’s on Smartkarma

Industrials: Harmonic Drive Systems, Toshiba Corp, SMC Corp, SAMPYO Cement, Kalpataru Power Transmission, Triveni Turbine and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Harmonic Drive – Orders Rolling Over
  • About an Article on Corporate Governance or Economic Security
  • SMC – Guidance Ignores Potential For Down Cycle
  • Sampyo Cement: Likely Exit from KOSDAQ150 & Move to KOSPI
  • Kalpataru Power – All Eyes on Merger
  • 4QFY22 Result Update – Triveni Turbine

Harmonic Drive – Orders Rolling Over

By Mio Kato

  • Harmonic Drive posted revenue that was a touch above guidance but just below consensus and rather weak OP of just ¥2.23bn. 
  • While that was just below consensus it represented a deviation from typical gross margin and SG&A trends that is concerning. 
  • More troubling however is the drop in orders and particularly the composition thereof.

About an Article on Corporate Governance or Economic Security

By Aki Matsumoto

  • I have considered the Nikkei article, “How to lead Toshiba, which has been split at the seams over security and the Corporate Governance Code, down the path of revitalization.”
  • Toshiba may not have made serious business decisions on its own for many years because it’s been working in tandem with METI as a company responsible for METI’s key policies.
  • Toshiba has adopted its Company with US-type 3-Committees for over 10-years, but provides a case of how board practices that are just for appearances don’t improve actual practices and performance.

SMC – Guidance Ignores Potential For Down Cycle

By Mio Kato

  • SMC 4QFY22 was in-line with consensus revenue estimates at ¥185bn, but missed at the OP level with ¥52.7bn (10% below consensus) in a now familiar pattern for the sector. 
  • The company’s FY23 guidance was strong projecting revenue of ¥805bn (+4.5% vs. consensus) and OP of ¥265bn (+6.9% vs. consensus). 
  • The problem is that this ignores the typical cyclicality for the company and we believe OP will in fact be down YoY.

Sampyo Cement: Likely Exit from KOSDAQ150 & Move to KOSPI

By Douglas Kim

  • Sampyo Cement which is currently included in KOSDAQ150 is likely to be removed from this index in the coming months as the company wants to move to KOSPI.
  • If Sampyo Cement is excluded from KOSDAQ150, we estimate there could be about 9 billion won worth of passive funds which could exit the stock. ADTV is 1.6 billion won.
  • Therefore, we believe Sampyo Cement’s shares could face further weakness in the next several months. It will hold an EGM to vote on the move to KOSPI on 4 July.

Kalpataru Power – All Eyes on Merger

By Emkay

  • KPTL results highlights: A lower order book and delays in dispatch led to an 8% revenue decline in FY22, with a margin decline of ~130bps.
  • JMC Projects results highlights: JMC Projects delivered 45% revenue growth on the back of a very strong order book (Book-to-bill of ~4x), better than management’s guidance of 20% growth.
  • Large projects: KPTL has been bidding for large projects in the recent past and recently bagged a large HVDC order worth Rs32bn.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


4QFY22 Result Update – Triveni Turbine

By Nirmal Bang

  • Domestic market update: In FY22, the domestic market under 30MW is estimated to have grown by 71% YoY in MW terms.
  • Exports update: The international market under 30MW is estimated to have declined by 24% YoY in FY22 in MW terms.
  • mpact of Russia-Ukraine conflict: TTL has reduced orderbook by Rs400mn due to the Russia-Ukraine conflict as it took out certain orders from steel mills in Ukraine due to lack of visibility.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Before it’s here, it’s on Smartkarma

Industrials: Kito Corporation, Hyundai Heavy Industries, Bharat Electronics, Brambles Ltd, Recruit Holdings, HomeServe PLC, Hyundai Motor Co and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Kito (6409) Goes Private. Again. This Time With KKR, But Watch the Register
  • Block Deal Sale of Hyundai Heavy Industries
  • NIFTY100 Index Rebalance Preview: Five Potential Changes in September
  • CVC Sizes Up Brambles (BXB AU)
  • Hyundai Heavy Liquidation by KSOE & Passive Flow Tightening Recalculations
  • CVC to Lob an Offer for Brambles?
  • Conviction Call Recruit: All Good Things Must Come to an End
  • Recruit (6098 JP) | Too Conservative on Labour Outlook
  • Brookfield/HomeServe Close to Reaching an Agreement
  • Joe Biden’s Visit to South Korea: Hyundai Motor Ready to Announce $7 Billion Investment in EVs in US

Kito (6409) Goes Private. Again. This Time With KKR, But Watch the Register

By Travis Lundy

  • Kito Corporation (6409 JP) was taken private in 2003. It was re-IPOed by Carlyle in 2007 but Konecranes stayed an investor until 2016. Then it unwound.
  • Today, Kito announced the best results since pre-covid and forecasts for growth. They also announced KKR unit Crosby would launch a Tender to buy them out at a 62% premium.
  • Shareholder structure is highly unusual, and interesting to boot, especially looking at the most recent arrival in the top two. The fact there is a break fee is… telling.

Block Deal Sale of Hyundai Heavy Industries

By Douglas Kim

  • After the market close today, Korea Shipbuilding & Offshore Engineering announced that will sell 1.7% of its shares (1.5 million shares) in Hyundai Heavy Industries in a block deal.
  • The block deal sale is expected to take place on the morning of 17 May. The block deal price is expected to be 120,650 won.
  • We would take this deal as we believe this sale is likely to have a short term positive impact on HHI and increase the free float of HHI.

NIFTY100 Index Rebalance Preview: Five Potential Changes in September

By Brian Freitas


CVC Sizes Up Brambles (BXB AU)

By David Blennerhassett

  • Brambles Ltd (BXB AU) has confirmed that it has had a preliminary engagement with Luxembourg-based CVC in regard to an unsolicited proposal to acquire all of its shares. 
  • No formal proposal has yet been received. No price was made public although various media reports indicate a A$20bn bid, which may or may not hinge off an EV figure.
  • In is 3Q22 trading update, Brambles upgraded its FY22 revenue and earnings guidance, despite ongoing cost inflation and pallet shortages.

Hyundai Heavy Liquidation by KSOE & Passive Flow Tightening Recalculations

By Sanghyun Park

  • KSOE will sell 1.5M shares, equivalent to 1.70% of SO, at an expected discount rate of 5%. After the disposal, KSOE’s stake will fall to 78.02%.
  • The need to increase float shares (and loan balance) due to the MSCI inclusion and the KOSPI 200 up-weight should be considered as the company’s pre-emptive response to the market.
  • But even with today’s disposal, the MAXIMUM real-world float will be 11.29%. An additional passive inflow equivalent to 1.73% of SO will occur until June 9th, 5.13x ADTV. 

CVC to Lob an Offer for Brambles?

By Arun George

  • Brambles Ltd (BXB AU) responded to press speculation by stating it had preliminary discussions with CVC Capital on a privatisation proposal. The shares rose 11.2% to close at A$11.60.
  • The AFR’s rumour of “a bid valuing Brambles at more than $20 billion, including debt” would imply an offer price around A$11.50, a 10% premium to the undisturbed price.
  • As the Australian takeover premium ranges from 20% to 40%, we think that a bid of around A$13 per share (25% takeover premium) will be necessary for due diligence access.

Conviction Call Recruit: All Good Things Must Come to an End

By Shifara Samsudeen, ACMA, CGMA

  • Recruit Holdings (6098 JP) reported 4Q and full-year FY03/2022 results today. Revenue grew 23.9% YoY to JPY759.9bn while OP more than doubled to JPY45.4bn during 4QFY03/2022.
  • Full-Year revenues grew 26.5% YoY to JPY2,871.7bn which was about 3.0% above the upper range of guidance (JPY2,700-2,800bn) while OP of JPY378.9bn was within the guidance of JPY350-380bn.
  • Though full-year results were strong, 4QFY03/2022 results show that the company’s earnings have begun to weaken with normalisation of recruitment and staffing markets with Covid conditions easing off.

Recruit (6098 JP) | Too Conservative on Labour Outlook

By Mark Chadwick

  • FY3/22 EBITDA rose 96% driven by the recovery in the global labour market. Macro conditions suggest the coming year will be less exciting 
  • EBITDA is expected to rise just 2% this year, adjusting for changes in stock-based comp 
  • However, the 32% decline in the stock price YTD suggests the market is on top of the weaker outlook. We see 40% upside to the stock price 

Brookfield/HomeServe Close to Reaching an Agreement

By Jesus Rodriguez Aguilar

  • Media reports that HomeServe and Brookfield are close to reaching an agreement. Since news of the approach broke, the share price of HomeServe has increased by c. 52%.
  • My fair value estimate (DCF based) is 1,206p, which could presumably be enough for the founder to sell its 12.1% stake (enough to prevent a squeeze-out).
  • At1,206p (71% premium to the price prior to disclosures), a financial buyer could obtain a 15.3% cumulative IRR by year 8. Long HSV LN.

Joe Biden’s Visit to South Korea: Hyundai Motor Ready to Announce $7 Billion Investment in EVs in US

By Douglas Kim

  • The US President Joe Biden is planning to visit South Korea on 20 to 22 May to meet the new South Korean President Yoon Suk-Yeol.
  • Hyundai Motor is likely to announce investments of nearly $7 billion for building a mega EV facility in Georgia which was leaked in the media in the last few days.
  • Hyundai Motor is aggressively penetrating the global EV markets and it is becoming an increasing threat against Tesla. Hyundai Motor has outperformed Tesla in the past 6 months.

Before it’s here, it’s on Smartkarma

Industrials: Japan Post Holdings, Adani Enterprises, Kintetsu World Express, Brambles Ltd, Horiba Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Japan Post Holdings (6178 JP) – Ugly Group Forecasts But a Very Bigly Buyback
  • NIFTY50 Index Rebalance Preview: High Probability Add; Impact Higher than the Headline Numbers
  • Japan Post Holdings – Silly Guidance And A Not So Silly Buyback
  • Kintetsu World Express (9375 JP) Tender Offer by Parent – Too Cheap But Tough To Block
  • Brambles (BXB AU): Where Could CVC’s Bid Come In?
  • Horiba (6856 JP): Semiconductor Division Leads Upward Revision for FY Dec-22

Japan Post Holdings (6178 JP) – Ugly Group Forecasts But a Very Bigly Buyback

By Travis Lundy

  • Japan Post Holdings (6178 JP) and its two main components Japan Post Insurance (7181 JP) and Japan Post Bank (7182 JP) reported excellent earnings for the year to March 2022…
  • ….but not so excellent forecasts for the year to March 2023. Some of that is conservative. Some is “finger-in-the-air”, and some of it is the vagaries of insurance sales accounting.
  • But they all pay high dividends and Japan Post Holdings announced a ¥200bn buyback. And remember, there will likely Never Be Another JPH Equity Offering, Ever Again. Ever. 

NIFTY50 Index Rebalance Preview: High Probability Add; Impact Higher than the Headline Numbers

By Brian Freitas


Japan Post Holdings – Silly Guidance And A Not So Silly Buyback

By Mio Kato

  • Japan Post Holdings beat by 1.5% at the revenue line and 1% at the NP line with each of the three major businesses beating guidance slightly. 
  • Guidance was, as usual, for NP to decline YoY and at ¥400bn was slightly below consensus at ¥428bn. 
  • The more important news was a buyback for ¥200bn or 7.6% of outstanding shares.

Kintetsu World Express (9375 JP) Tender Offer by Parent – Too Cheap But Tough To Block

By Travis Lundy

  • Kintetsu Group Holdings Co L (9041 JP) has announced a Tender Offer to acquire the shares in Kintetsu World Express (9375 JP) that it doesn’t hold (it controls 47%)
  • This is not a done deal, but they only need about 20% of the remaining 53%. 
  • At a 40% premium to last after a great year, this is still being done at the wrong price. But it will likely get done

Brambles (BXB AU): Where Could CVC’s Bid Come In?

By Brian Freitas

  • Brambles Ltd (BXB AU) is in preliminary discussions for CVC to acquire all shares in the company. Media speculation indicates the bid would be at an Enterprise Value > A$20bn.
  • Brambles Ltd (BXB AU) trades cheaper than its peers and a bid at an EV/EBITDA of 9x would imply a buyout price of A$12.84/share, a 23.1% premium to last close.
  • At the last traded price of A$11.58/share, there is upside. Especially if other private equity investors enter the fray. Buy on weakness; hedge market risk with ASX200 futures.

Horiba (6856 JP): Semiconductor Division Leads Upward Revision for FY Dec-22

By Scott Foster

  • Sales of semiconductor equipment are running ahead of guidance. Management now sees a considerably stronger 2H and 19% operating profit growth in FY Dec-22 as a whole.
  • In the longer term, Japan – U.S. semiconductor cooperation should benefit Horiba and other companies in the Japanese semiconductor industry.
  • Selling at 10.5x new EPS guidance for FY Dec-22. Not meaningfully cheap if a down-cycle is coming, but attractive if it is not imminent and security concerns support demand.

Before it’s here, it’s on Smartkarma

Industrials: Toshiba Corp, Digital Turbine and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Toshiba (6502) – Iffy Earnings, Worse Projections, A Special Div, But Privatisation Process Proceeds
  • Toshiba – Special Dividend Not Enough To Offset Negatives
  • Greenhaven Road Capital Q1 2022 Letter

Toshiba (6502) – Iffy Earnings, Worse Projections, A Special Div, But Privatisation Process Proceeds

By Travis Lundy

  • Toshiba announces meh-to-weak earnings and surprisingly conservative revenue guidance for next year given better order books and backlog and much higher USD/yen.
  • The company announced a slightly higher March 2022 dividend (giving money to past shareholders) and a big special dividend and higher March 2023 dividend.
  • The Privatisation Proposal Process continues. It may get a result, or not. New director choices will wait. Now we start a quiet period where privatisation news competes with analyst bearishness.

Toshiba – Special Dividend Not Enough To Offset Negatives

By Mio Kato

  • Toshiba reported results on Friday which were just a touch above their revised February guidance at ¥3.35trn in revenue and ¥159bn in OP. 
  • Guidance was poor with revenue of ¥3.3trn below consensus ¥3.4trn and OP of ¥170bn noticeably below consensus’ ¥202bn. 
  • The nomination of directors was also postponed and some segments showed a marked deterioration in profitability.

Greenhaven Road Capital Q1 2022 Letter

By Fund Newsletters

  • Greenhaven Road Capital Partners Fund returned approximately -26.5% net in the first quarter.
  • The three big factors that currently appear to be dominating investors’ focus are rising interest rates/inflation, rising oil prices, and war in Ukraine.

Before it’s here, it’s on Smartkarma

Industrials: Mitsubishi Heavy Industries, Wice Logistics, Bumble and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Mitsubishi Heavy (7011 JP) | Just Getting (Re)Started
  • WICE: Earnings Still Continue to Expand in 2022 with Potential Upside
  • Polen U.S. Small Company Growth Q1 2022 Portfolio Manager Commentary

Mitsubishi Heavy (7011 JP) | Just Getting (Re)Started

By Mark Chadwick

  • MHI reported a strong 7% growth in the order backlog to ¥5,500 billion
  • MHI is a beneficiary of the global energy crisis, geared into gas turbine and nuclear supply chains
  • The stock is trading below book value (10 year average 1x) at a time when the core energy order book is as strong as ever

WICE: Earnings Still Continue to Expand in 2022 with Potential Upside

By Pi Research

  • Expect impact from an expected drop in sea freight rate (50% of WICE revenue link to this freight price) is likely to be offset by an increase in cross border
  • We have factored in impact from China border restriction and a gradual drop in sea-air freight,which we anticipated to normalize to pre-COVID-19 gradually.Our revenue forecast at Bt8.2bn is on conservative
  • WICE report 1Q22 net profit at Bt158m (+93%YoY and -13%QoQ). QoQ contraction from all-time high level in 4Q21 was due to a drop in air freight and cross border revenue

Polen U.S. Small Company Growth Q1 2022 Portfolio Manager Commentary

By Fund Newsletters

  • Polen Capital is a high-conviction growth investment manager.
  • Over the first quarter, Polen U.S.
  • Small Company Growth Composite Portfolio returned -21.98% gross and -22.18% net of fees, respectively, underperforming the -12.63% return of the Russell 2000 Growth Index.

Before it’s here, it’s on Smartkarma